Australian Tax Brackets 2026-27: What Changed on 1 July 2026
From 1 July 2026, the tax rate on income between $18,201 and $45,000 dropped from 16% to 15% — the first step of the personal tax cuts legislated in the 2025 Federal Budget. A further cut to 14% is legislated for 1 July 2027.
2026-27 resident tax brackets
| Taxable income | Rate | Tax on this bracket |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 15% | 15c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,020 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,020 plus 37c for each $1 over $135,000 |
| Over $190,000 | 45% | $51,370 plus 45c for each $1 over $190,000 |
These rates exclude the 2% Medicare Levy. Foreign residents pay 30% from the first dollar (no tax-free threshold) and working holiday makers pay 15% up to $45,000.
How much is the tax cut worth?
Anyone earning $45,000 or more saves exactly $268 in 2026-27 compared with 2025-26 rates (1% of the $26,800 between the thresholds). Below $45,000 the saving is 1c for every dollar of taxable income above $18,200.
Offsets and the Medicare Levy
- Low Income Tax Offset (LITO): up to $700 for incomes to $37,500, tapering to $325 at $45,000 and to nil at $66,667.
- Medicare Levy: 2% of taxable income, with no levy below the single low-income threshold and a phase-in band above it.
- Medicare Levy Surcharge: an extra 1–1.5% for singles earning above $105,000 (2026-27) without private hospital cover.
Worked examples (2026-27, Australian resident)
| Taxable income | Income tax | LITO | Medicare Levy | Total |
|---|---|---|---|---|
| $50,000 | $5,520 | −$250 | $1,000 | $6,270 |
| $80,000 | $14,520 | — | $1,600 | $16,120 |
| $120,000 | $26,520 | — | $2,400 | $28,920 |
Examples assume no deductions, no study loan, and private hospital cover (so no surcharge). Your circumstances will differ — treat these as estimates only.